Question 1

Having liabilities classified incorrectly will have a big impact on the company's current ratio.

Accepted Answer

A) True 
 B)False

Question 2

State sales tax collected by a company is generally paid to the state at the end of the year.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following would NOT be part of an employer's payroll taxes?

Accepted Answer

A) Federal income tax 
B) FICA 
C) FUTA 
D) SUTA 
A) Federal income tax 
B) FICA 
C) FUTA 
D) SUTA

Question 4

The debt ratio equals total assets divided by total liabilities.

Accepted Answer

A) True 
 B)False

Question 5

Bonds that are backed by collateral are:

Accepted Answer

A) unsecured bonds. 
B) convertible bonds. 
C) callable bonds. 
D) secured bonds. 
A) unsecured bonds. 
B) convertible bonds. 
C) callable bonds. 
D) secured bonds.

Question 6

If the market rate of interest is less than the bond's stated rate of interest, the bond will be issued at:

Accepted Answer

A) par. 
B) a premium. 
C) a discount. 
D) maturity value. 
A) par. 
B) a premium. 
C) a discount. 
D) maturity value.

Question 7

One type of liability that is easy to overlook is a(n):

Accepted Answer

A) tax liability. 
B) note payable. 
C) account payable. 
D) contingent liability. 
A) tax liability. 
B) note payable. 
C) account payable. 
D) contingent liability.

Question 8

Warranty expense must be estimated and matched to revenues.

Accepted Answer

A) True 
 B)False

Question 9

Leases that are treated as financed purchases are called:

Accepted Answer

A) capital leases. 
B) operating leases. 
C) expense leases. 
D) revenue leases. 
A) capital leases. 
B) operating leases. 
C) expense leases. 
D) revenue leases.

Question 10

Marla Smith, an employee of Clown College, earned $113,000 prior to December. Smith's salary for December is $11,000. For what amount will Smith's December salary be subject to OASDI tax and HI tax, respectively.

Accepted Answer

A) OASDI $5,500; HI $5,500 
B) OASDI $5,500; HI $11,000 
C) OASDI $11,000; HI $5,500 
D) OASDI $11,000; HI $11,000 
A) OASDI $5,500; HI $5,500 
B) OASDI $5,500; HI $11,000 
C) OASDI $11,000; HI $5,500 
D) OASDI $11,000; HI $11,000

Question 11

The amount that a borrower must pay back to the bondholders on the maturity date is the:

Accepted Answer

A) principal. 
B) interest. 
C) stated value. 
D) market value. 
A) principal. 
B) interest. 
C) stated value. 
D) market value.

Question 12

A contingent liability arises because of a past event, but is dependent upon a future event.

Accepted Answer

A) True 
 B)False

Question 13

Bonds that may be retired at a prearranged price are called:

Accepted Answer

A) convertible bonds. 
B) term bonds. 
C) secured bonds. 
D) callable bonds. 
A) convertible bonds. 
B) term bonds. 
C) secured bonds. 
D) callable bonds.

Question 14

A 12-month, 8% note dated August 1, 2016 for $5,000 would have accrued interest payable on December 31, 2016 of $166.67.

Accepted Answer

A) True 
 B)False

Question 15

On January 1, Greene Autos signed a $270,000, 8%, 30-year mortgage that requires semiannual payments of $11,934 on June 30 and December 31 of each year. The journal entry to record the second semiannual payment would be: (Round your final answer to the nearest dollar.)

Accepted Answer

A) debit Interest Expense, $10,755; debit Mortgage Payable, $1,179; credit Cash, $11,934. 
B) debit Mortgage Payable, $11,934; credit Cash, $11,934. 
C) debit Interest Expense, $10,755; debit Mortgage expense, $1,179; credit Cash, $11,934. 
D) debit Interest Expense, $1,179; debit Mortgage Payable,$10,755; credit Cash, $11,934. 
A) debit Interest Expense, $10,755; debit Mortgage Payable, $1,179; credit Cash, $11,934. 
B) debit Mortgage Payable, $11,934; credit Cash, $11,934. 
C) debit Interest Expense, $10,755; debit Mortgage expense, $1,179; credit Cash, $11,934. 
D) debit Interest Expense, $1,179; debit Mortgage Payable,$10,755; credit Cash, $11,934.

Question 16

The accounting treatment of a contingent liability depends upon the likelihood of an actual obligation occurring.

Accepted Answer

A) True 
 B)False

Question 17

A $30,000 bond issue with a stated interest rate of 5%, when the market rate of interest is 6%, means that the bond will sell for:

Accepted Answer

A) $30,000 
B) more than $30,000. 
C) less than $30,000. 
D) $40,000 
A) $30,000 
B) more than $30,000. 
C) less than $30,000. 
D) $40,000

Question 18

Accounts Payable is generally listed first under long-term debt.

Accepted Answer

A) True 
 B)False

Question 19

Most single individuals will claim:

Accepted Answer

A) 0 allowances. 
B) 0 or 1 allowances. 
C) 2 allowances. 
D) more than 2 allowances. 
A) 0 allowances. 
B) 0 or 1 allowances. 
C) 2 allowances. 
D) more than 2 allowances.

Question 20

Safe Scooters, Inc. sold scooters which they knew had faulty brakes. Consumers found out, and Safe Scooters is now facing a lawsuit over the unsafe scooters; however, no dollar amounts have been assigned to the case. This lawsuit would be considered a(n):

Accepted Answer

A) deferred expense. 
B) contingent liability. 
C) estimated liability. 
D) known liability. 
A) deferred expense. 
B) contingent liability. 
C) estimated liability. 
D) known liability.

Having liabilities classified incorrectly will have a big impact on the company's current ratio.

State sales tax collected by a company is generally paid to the state at the end of the year.

Which of the following would NOT be part of an employer's payroll taxes?

The debt ratio equals total assets divided by total liabilities.

Bonds that are backed by collateral are:

If the market rate of interest is less than the bond's stated rate of interest, the bond will be issued at:

One type of liability that is easy to overlook is a(n):

Warranty expense must be estimated and matched to revenues.

Leases that are treated as financed purchases are called:

Marla Smith, an employee of Clown College, earned $113,000 prior to December. Smith's salary for December is $11,000. For what amount will Smith's December salary be subject to OASDI tax and HI tax, respectively.

The amount that a borrower must pay back to the bondholders on the maturity date is the:

A contingent liability arises because of a past event, but is dependent upon a future event.

Bonds that may be retired at a prearranged price are called:

A 12-month, 8% note dated August 1, 2016 for $5,000 would have accrued interest payable on December 31, 2016 of $166.67.

On January 1, Greene Autos signed a $270,000, 8%, 30-year mortgage that requires semiannual payments of $11,934 on June 30 and December 31 of each year. The journal entry to record the second semiannual payment would be: (Round your final answer to the nearest dollar.)

The accounting treatment of a contingent liability depends upon the likelihood of an actual obligation occurring.

A $30,000 bond issue with a stated interest rate of 5%, when the market rate of interest is 6%, means that the bond will sell for:

Accounts Payable is generally listed first under long-term debt.

Most single individuals will claim:

Safe Scooters, Inc. sold scooters which they knew had faulty brakes. Consumers found out, and Safe Scooters is now facing a lawsuit over the unsafe scooters; however, no dollar amounts have been assigned to the case. This lawsuit would be considered a(n):

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

Inventory

The Challenges of Accounting: Standards, Internal Control, Audits, Fraud, and Ethics

Cash and Receivables

Long-Term and Other Assets

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 9: Current Liabilities and Long-Term Debt

Having liabilities classified incorrectly will have a big impact on the company's current ratio.

State sales tax collected by a company is generally paid to the state at the end of the year.

Which of the following would NOT be part of an employer's payroll taxes?

The debt ratio equals total assets divided by total liabilities.

Bonds that are backed by collateral are:

If the market rate of interest is less than the bond's stated rate of interest, the bond will be issued at:

One type of liability that is easy to overlook is a(n):

Warranty expense must be estimated and matched to revenues.

Leases that are treated as financed purchases are called:

Marla Smith, an employee of Clown College, earned $113,000 prior to December. Smith's salary for December is $11,000. For what amount will Smith's December salary be subject to OASDI tax and HI tax, respectively.

The amount that a borrower must pay back to the bondholders on the maturity date is the:

A contingent liability arises because of a past event, but is dependent upon a future event.

Bonds that may be retired at a prearranged price are called:

A 12-month, 8% note dated August 1, 2016 for $5,000 would have accrued interest payable on December 31, 2016 of $166.67.

On January 1, Greene Autos signed a $270,000, 8%, 30-year mortgage that requires semiannual payments of $11,934 on June 30 and December 31 of each year. The journal entry to record the second semiannual payment would be: (Round your final answer to the nearest dollar.)

The accounting treatment of a contingent liability depends upon the likelihood of an actual obligation occurring.

A $30,000 bond issue with a stated interest rate of 5%, when the market rate of interest is 6%, means that the bond will sell for:

Accounts Payable is generally listed first under long-term debt.

Most single individuals will claim:

Safe Scooters, Inc. sold scooters which they knew had faulty brakes. Consumers found out, and Safe Scooters is now facing a lawsuit over the unsafe scooters; however, no dollar amounts have been assigned to the case. This lawsuit would be considered a(n):

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

Inventory

The Challenges of Accounting: Standards, Internal Control, Audits, Fraud, and Ethics

Cash and Receivables

Long-Term and Other Assets

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Financial Statement Analysis

Filters